Fiasco At Figgie International

When A Tough Boss Called On Management Consultants To Help His Firm,

What He Ended Up With Went Beyond His Wildest Dreams.

August 03, 1997|By James O'Shea and Charles Madigan. James O'Shea is the Tribune's deputy managing editor/news. Charles Madigan is a Tribune senior writer.

Harry Figgie struck a tough but regal pose for the photographer from Fortune magazine. With a scowl on his leathery face, the chairman of Figgie International stood on the staircase at the company's headquarters, just high enough to tower over a bronze bust of Thomas Jefferson at the foot of the stairs. Figgie wore a dark suit and a conservative tie drawn so tightly that his collar seemed one size too small. His left hand was stuffed into his pocket, but his right hand clutched the polished wooden banister like an eagle's claw. His jaw was clenched, accentuating the lines that 65 years had etched into his rugged face. He stared at the camera and, when the shutter clicked, Harry was looking down at the photographer, a familiar pose according to those who knew him well.

To thousands of his employees at the Ohio conglomerate near Cleveland, Harry Figgie had earned his place in the February 1989 pages of Fortune for a piece on America's Toughest Bosses. Over the prior 2 1/2 decades, Figgie had knocked heads together to build the company that bore his name into one of the largest corporations in America. He wasn't as notorious as some others on the Top 10 list, such as Frank Lorenzo, the union-busting chairman of Texas Air, or Richard Mahoney, the demanding boss at Monsanto. But the luster of his colleagues didn't diminish Figgie. As a boss, he made George Steinbrenner look like Mr. Rogers. Critics dubbed his management style "hire 'em, tire 'em, and fire 'em," a reflection of his tendency to sack hardworking employees if they didn't meet his bottom-line expectations. He was mercurial, blunt, brutal, and sometimes profane. "You don't build a company like this with lace on your underwear," he once barked at a reporter. And he left little doubt that he could manhandle executives and machinists alike: ". . . I won't deny it," he said, "I know how to chew ass."

The company he ran wasn't a corporate icon like General Electric or some of the other outfits run by the men in the Fortune story. But that didn't mean Americans hadn't seen Figgie's products. Starting in 1963, Figgie had acquired dozens of small companies and had merged them into Figgie International, the Ichabod Crane of American corporations. By 1989, it included 36 divisions with dozens of unrelated products, although most weren't publicly associated with the name Figgie.

The company owned Rawlings Sporting Goods, the official supplier of Major League Baseball and America's largest source of sports equipment for professional, college, and high school teams; Scott Aviation, manufacturer of emergency oxygen masks that dropped from the ceiling of an airplane when cabin pressure plunged; Sherwood Drolet, the world's leading producer of hockey sticks and the official supplier for the National Hockey League; a material handling division that made high-speed baggage handling systems used in the world's airports; American LaFrance, the nation's oldest manufacturer of fire engines; a power system division that made hydraulic and pneumatic cylinders and gears; George J. Meyer Co., a major producer of automated filling and packaging systems used by the soft drink, beer, wine, pharmaceutical, food, and cosmetic industries; plus numerous other divisions that made everything from missile parts for the defense industry to scissor lifts for construction crews and firefighters.

In the year Harry Figgie's picture graced the pages of Fortune, Figgie International climbed to No. 286 on the Fortune 500, the magazine's infamous Who's Who of corporate America. Year-end revenues reached $1.31 billion. The company generated nearly $63 million in profits for its 10,887 shareholders and employed 17,000 people around the globe. Figgie recorded a stellar performance that year, and Harry Figgie knew it. But he also knew something that he didn't volunteer to Fortune's readers: The glow of the company's earnings and its lofty perch in the corporate hierarchy overshadowed some serious problems festering in the company's far-flung divisions.

Some of the problems were acute. Figgie had made a string of bad acquisitions in recent years, particularly in the division that housed Figgie's insurance business, which lost $13.5 million between 1985 and 1988. But chronic problems plagued the manufacturing divisions, the core of Figgie International.